The CMO Doesn't Own Big Data

Much is being made these days about chief marketing officers (CMOs) taking over technology budgets from the chief information officer (CIO). This is a myth, says Kevin Cochrane, CMO of OpenText, a $1.3B information management software company that helps retailers better understand their customers no matter where or how they interact.

"The financial services industry and many other companies in various different verticals have been dealing with Big Data for a very long time, slicing and dicing their customer base in order to identify next best action or next best offer in order to determine how best to drive an advertising campaign, for example," says Cochrane.

What's given rise to the CMO myth is the digital marketing revolution. Suddenly, everyone is focused on Big Data and the new software tools used to track and manage customer engagement and marketing.

But, says Cochrane, "Web analytics is not Big Data. Web analytics is indicative of a type of consumer behavior that needs to be put into a broader picture, a 360-degree view of your customer, in order to identify meaningful patterns, to drive some sort of engagement, to get them to a specific outcome, i.e., clicking on the 'Buy' button or getting them into the store."

OpenText works with retailers big and small to manage these interactions, and what they see is CMOs are increasingly concerned about getting joined data, not just single streams like Web traffic or Facebook "Likes."

"They're looking to put in place new strategies for driving engagement over a customer's lifecycle," says Cochrane. "That requires insights into the full suite of customer information from back-end CRM systems to the call center to what's happing through point-of-sale (POS) terminals and tying all that back to their back-end information management system that are doing things like managing inventory in a store."

Living the dream

So luxury and lifestyle brands need to do more than just analyze Web data in order to identify next-best-offer (NBO). They're customers aren't always buying online like Amazon. What these companies have to do is keep the customer engaged with their brand year-after-year by blending all of their customer touch-points to create an experience that shopper will identify with and prefer over competitors.

Dollar General, on the other hand, is all about speeds and feeds, competing on price for products that have a defined unit-of-value for the consumer. Since it doesn't matter where someone buys toothpaste or iPods, price is king. Amazon falls into this category, as well.

"[The consumer] is just looking for the most convenient place to get it at the lowest possible price," says Cochrane.

If that is the case, then, traditionally, the CMO's role isn't quite as important. The only marketing function is to get the NBO out to the customer as quickly efficiently as possible so you can sell them more stuff during each interaction. This is a simple cross-sell and upsell of the shopping cart at the point of transaction. Commodity retailers also need to acquire customers at the lowest possible cost.

"But what retailers are increasingly trying to do is they are trying to actually differentiate themselves based on the customer experience and, in doing so, they're looking to get out of the commodity-price driven sales model," says Cochrane. "They're actually looking to get the customer to have loyalty to their brand and to continually come back to them over time."

In the dark days before Big Data, spending money on analytics was difficult to justify because of the cost of applying it to commodity items with thin margins was too high.

"That is actually changing quite markedly," says Cochrane. "What luxury goods retailers have always done is promoted a lifestyle ... to consistently sell to same customer over time. For the very first time … that can be brought down-market. So Target's a very, very good example. I would argue that target actually sells a lifestyle. It sells a lifestyle to a consumer that is budget-conscience but still aspires to own nice things."

Target is no longer the low-cost provider and yet they've done an excellent job of brand building and management to keeping people coming back anyway.

eComm 101

In the early days of e-commerce, what retailers did online was completely divorced from all the existing back-end systems like CRM, transaction, and inventory management. The online measurement systems just measured online activity. Web 1.0 was all about the product catalog and acquiring eyeballs at the lowest possible cost by doing targeted promotions based on Web analytics.

Although still a common model, it is changing.

"Everyone is fleeing from that online retail model across the board," says Cochrane. "What I really need to do is I need to know who my customer is and relate to them not as a segment, but as an individual, and I need to start tying together all my systems so I can analyze their behavior."

So, specifically, retailers want to know what have their customers bought, where they bought it -- online, in-store, or catalog -- and how they found it. They also want to know what they do on the website and how do they want to be a approached: Do they prefer online shopping or bricks and mortar? Do they use a smartphone exclusively to surf the Web or a combination of devices? How about time of day? Are they just online in the evening and in the stores on Saturdays?

Basically, what do they like and dislike and as much information about each of those things as possible is what retailers are after today. Then they want to know how their store clerks can identify that customer in real-time so when they walk in they get a personalized experience ever time.

"Everyone is looking to have that concierge-like experience and a joined-up online marketing strategy that's tying together not just online purchases, but the online experience to the experience that actually happens in the store," says Cochrane. "Its a whole new wave that's happening in the retail space."

It's not just NBO or next-best-click, anymore. Marketers need to think about selling an "aspirational lifestyle" to customers in a one-on-one manner.

Clicks and mortar

To get from where they are today to where they need to be to drive experiential marketing, retailers are doing some heavy technology lifting and that is why a good CMO needs a good CIO.

"At a minimum there's three separate data pools in any sort of large retail organization that are not joined up across the board," says Cochrane, whose company specializes in helping companies join these data sets.

The way its been done until today is if you have say, 2,000 stores, at the end of every day there is a batch upload of data. Then there might be some Big Data analytics done to generate daily or week-end reporting. And then there is everything going on real-time in their inventory systems like what's in stock and what's in the pipeline.

But Big Data doesn't have to wait for all of these disparate sources to be joined to work. Just showing Web analytics data to a call center agent allows them to see what you've just done online (provided you have an account with the retailer) because its pulling a feed from the Web analytics database.

"This is the new wave of Big Data, which is joining up all the disparate data sources for more real-time marketing … We see a massive wave of investment happening right now to pull together all of the disparate systems so you can build one common 360-degree view of the customer," says Cochrane.

OpenText's solutions sit on top of other analytics and database vendors like SAS, SAP, Tibco, IBM, Oracle, etc. and other data aggregators. They work with CMOs to help them join forces with their CIOs so marketers can leverage Big Data to drive personalized omni-channel campaigns and maximize customer lifetime value.

Into the breech

For now, luxury goods retailers are leading charge because of the nature of their clientele. But, with more pervasive marketing automation technology and cheaper hardware to run it on as well as greater awareness of the demand for this type of marketing coming from consumers, a lot of that has moved down market to commodity retailers like Target and Wal-Mart.

"Marketers used to, basically, take most of their discretionary dollars and park them with an advertising agency and they had no idea where the ad agency spent their money or not," says Cochrane from experience. "And they had no idea if they were effective or not. They were just basically buying impressions. That was crazy. Today, I can spend a tenth of that online and I can get ten times the results and track and measure it."

Not only has the Web and ecommerce give marketers greater access to more shoppers in more ways than every before its also allowed them to wrest control of their budgets back from the ad agencies.

"At the end of the day CMOs cannot do this by themselves ... to truly map campaign effectiveness they need to map the entire customer journey, the entire lifecycle and then they need to join up POS terminal data with Web data an so on and so forth. They need the CIO to integrate the back end."

That's why the CMO doesn't "own" Big Data. No one does.

About the Author:

Now a freelance writer, in a former, not-to-distant life, Allen Bernard was the managing editor of CIOUpdate.com and numerous other technology websites. Since 2000, Allen has written, assigned and edited thousands of articles that focus on intersection of technology and business. As well as content marketing and PR, he now writes for Ziff Davis B2B, CIO.com, the Economist Intelligence Unit and other high-quality publications. Originally from the Boston area Allen now calls Columbus, Ohio home. He can be reached at 614-937-2316 or abernie182 @ gmail.com. Please follow him on Twitter at @allen_bernard1, on Google+ or on Linked In.

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